BIG DATA – The Only Business Model Left

My Partner, Paul Readwin (our Chief Intelligent Officer at Business Instincts Group) recently send me a great article on the Only Business Model Left. It’s an article that resonates very deeply with us here at Business Instincts Group and PODIUM Ventures.

Shomit Ghose, in his March 12 Forbes article, very aptly pointed out that with the cost of IT has practically dropped to nothing. The barrier of entry for competition is so low and the fight for market share so high that the notion of charging a customer for the privilege of using your infrastructure or code is almost nonexistent. What John Smith is suggesting is the only business model left is collecting your data and selling your information.

The amount of information that is now being produced is so vast, estimates suggest that in 2012 alone we will produce 2.7 Zettabytes (2.7 x 1021) of information. IBM recently announced that that it will be analyzing the data received from Project DOME, an upcoming telescope project that will produce more data in a year than in all of data produced by the Internet throughout its entire history.

With this much information we have the ability to analyze it all with so much more relevance due to the sheer number of data points. The analysis of this data gives us thousands of new perspectives on any given scenario, problem or event.

How many times did the word hope appear over the social graph after a presidential speech and by whom and where?

Why were phrases with the word purple used after new news stories would break in relation to Arab Spring? Anything with a pattern now becomes a point of relevant interest and is relatable to any other point of interest and relevance. The loop is endless and the potential insights are mind blowing.

Superstar startups of the near future are the ones that can produce data points from their user base, combine them with other data points and produce unique and relevant information based on their proprietary algorithms, or the algorithms of others.

Three sects of power brokers will emerge from this.

1.) Those who can position themselves to uniquely capture or create a data set.

2.) Those who can analysis this data.

3.) Those who can market and spin this data.

My prediction is that this data knows as BIG Data, (Yes we at Business Instincts Group, BIG, love the name of this new industry) will become so valuable and pervasive in our society that infrastructure cost will not just figuratively, but actually reach zero point.

Just any FYI, all of the startups we are building at BIG and financing at PODIUM Ventures, already incorporate some form of BIG Data in their business model.